By Daniel Hunter
The number of over-50s expecting to work past the state retirement age has risen to 6.5 million, an increase of 43% on the 4.5 million people planning to do so in 2010.
According to the annual Working Late Index from retirement specialist LV=, this group say they will carry on working for an extra 6.2 years on average.
More women than men intend to carry on working later in life, with 4.1 million women over 50 expecting to work past the state retirement age, compared to 2.4 million men.
However, men who expect to work past retirement will do so for over a year longer than their female counterparts. With men intending to work 6.9 years past state retirement age on average, versus 5.8 years for women.
“With the Government increasing the state pension age we would hope that those approaching retirement wouldn’t feel they need to work beyond it," Ray Chinn, LV= Head Of Pensions, said.
"Unfortunately, this is not the case as many find that they have insufficient funds in their pension pots. Although there are many people who feel too young to retire and want to work for as long as they can, our research shows the majority say they will be forced to do so to survive financially.”
Work and the City London is the place where over-50s say they will work furthest past the state retirement age, at an average of 7.4 years. Those in Scotland come a close second, where those who plan to work past state retirement age expect to do so for an additional 7.1 years on average. See table one below for a full regional breakdown.
Not by choice The reasons people are working past retirement age is shifting. The study reveals over half (52%) of working over-50s who expect to work beyond state retirement age cite ‘affordability’ as their main reason. While a third (36%) will stay in work because they enjoy it. This is down from 43% in 2010, highlighting that working past retirement is becoming less of a choice and more driven by necessity.
LV=’s working late index also reveals almost 4.3 million over-50s had retired but since returned to work. While some felt too young to retire (32%) and missed working life (30%), others wanted to give something back by working for charity (22%). However, 14% admit that their personal pension wasn’t enough to live on, and nearly one in ten (9%) had to return to work because the state pension wasn’t enough to support them.
One in five of those returning to work from retirement (20%) said they have made a complete career change, and almost one in ten (9%) said they set up a business and are now working for themselves.
“Regardless of how close people are to retirement, it is essential that saving remains a priority," Ray Chinn continued.
"The earlier in life you can start saving the better, but it’s never too late to make a significant difference to your pension pot. It’s worrying to see that only 13% of those approaching retirement have taken professional advice about their options, and almost half (48%) say they have no intention of doing so before they retire.
“There are many different options available to people at or near retirement, from which type of pension they have their money invested in, to whether they take a lifetime annuity, enhanced annuity, or put their money into drawdown. If someone qualifies for an enhanced annuity they can see their income in retirement rise by up to 30% for instance. People should seek professional advice to make sure they are getting the most out of the money they have saved for retirement.”
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